Sharp reaches record profits

Sharp Corp. achieved record profits and sales for the third straight year in the financial year just ended on strong demand for its LCD (liquid crystal display) televisions, cell phones and solar panels, the company said Wednesday.

Sharp was an early developer of LCD panel technology and the first major consumer electronics company to emphasize LCD TVs over CRT (cathode ray tube) models. With sales of flat-panel TVs rising, the company is now reaping the benefits of these early moves.

The popularity of LCD televisions is helping Sharp in two ways. Sales of own-brand TVs were strong and helped its information and communication division achieve a 12 percent jump in sales, while sales of panels to other companies for use in their own TVs were also strong, up 16 percent on the year.

During the year, LCD TV sales hit 4 million units, said Hiroshi Saji, corporate senior executive vice president of Sharp, at a Tokyo news conference. Overseas sales were slightly more than those in Japan, at 2.1 million units, he said. For the current year, total sales are forecast to be 6 million units with overseas sales hitting 3.6 million units.

The global market for LCD TV was estimated to be 23.6 million units last fiscal year and to be 42 million units this year, according to Saji. Those figures and Sharp’s sales estimates mean the company expects to lose some market share in the coming year despite higher sales. Sharp aims to keep revenue growing by concentrating on large-size, high-price TV sets.

Business was also brisk at its other divisions with not a single of Sharp’s six major product divisions showing a decrease in sales during the year. A few sectors showed some weakness, however. For example, sales of PCs were down although the decrease was covered by a jump in sales of copier/printers.

Overall, the company said net profit increased 15 percent to ¥88.7 billion (US$754 million) with net sales up 10 percent to ¥2.8 trillion for the financial year from April 2005 to March 2006.

The figures represent the third straight year of record sales and profits and Sharp expects the trend to continue. For the current financial year, which runs from April to March 2007, the company expects net profit to rise to ¥100 billion with net sales increasing to ¥3 trillion.

Sharp expects LCD panel sales to rise 14 percent to ¥980 billion and sales of LCD televisions to soar 34 percent to ¥550 billion. Together, the two LCD product sectors will be equivalent to about one half of all Sharp’s business, based on the forecast.

In the cell phone sector, which is Sharp’s third largest business, sales are expected to increase 6 percent to ¥470 billion, fueled by demand for new handsets, particularly TV models in Japan.

However, Sharp expects three of its business areas to see lower sales: projectors, CRT color TVs and flash memory chips.